Avoid these common pitfalls when looking for overseas investment properties. fizkes / Shutterstock.com
When we arrived in Waterford, Ireland, in 1998, we decided we wanted to own a home of our own there. The Celtic Tiger was an established economic phenomenon by the time we took up residence in Waterford, and the better part of the money that boom was throwing off was being plowed into real estate — building it, buying it, selling it, one Irishman to another. Dozens of the housing estates were…
This hack may seem lazy, but it really can be a great benefit to your lawn. Pearl PhotoPix / Shutterstock.com
If you’re all about making lawn care a breeze and caring for the environment, fit grasscycling into your routine. But what is grasscycling, and how will it actually benefit your lawn in the long run? Grasscycling means leaving your grass clippings on the lawn to decompose. It can nourish your lawn, save you time, effort, and money, and help you enjoy a lush carpet of green without breaking a…
Buying life insurance at 50 years old is definitely doable, but you need a plan. See how much life insurance you should have at this age. [[{“value”:”
Image source: The Motley Fool/Upsplash
There’s no one right way to buy life insurance when you’re 50. The exact amount of life insurance you should have at this age is based on a variety of factors, like your age, health status, income, and family situation.
Some 50-year-olds might have young children, and will want to get a term life insurance policy to provide coverage until their children are grown. Other 50-year-olds might want a whole life insurance policy that provides investment growth, as well as a death benefit.
Let’s look at a few frameworks for how to make the best decision when buying life insurance as a 50-year-old.
If you’re 50, ideally you’re at a point in your career where you’re well-established and making good money. These might be your prime earning years. When buying life insurance, many people try to buy enough to help replace their income for a certain range of years.
For example, a typical rule of thumb is to buy a life insurance policy with a death benefit equal to 10 to 12 years of your income. So if you make $80,000 per year, you should consider getting a term life insurance policy with a total death benefit of between $800,000 and $960,000.
Term life insurance is often the best choice if you want the largest amount of death benefit to replace your income. That’s because term life insurance premiums are much cheaper than whole life insurance. Based on The Ascent’s analysis, whole life insurance premiums are usually five to 15 times the cost of term life for the same amount of death benefit. So for example, if you can qualify for a term life insurance policy with a premium of $100 per month, that same amount of coverage with whole life insurance would cost $500 per month — or more.
If replacing your income is too expensive of a goal for your life insurance policy, you might want to consider a more focused target. Many people buy enough life insurance to pay off their loved ones’ debt in the event of their premature death. For example, you could choose a life insurance policy with enough death benefit to pay off your family’s mortgage, pay off your kids’ college expenses, or other financial goals.
You don’t always need to buy a $1 million life insurance policy to replace several years of income. Instead, you could find a more affordable term life insurance policy with a death benefit of (for example) $500,000 or less.
What if your kids are already grown, your mortgage is on track to be paid off, but you just want to provide your loved ones with extra protection? Life insurance can help you leave a financial legacy. Whether you choose a lower-cost term life insurance policy with a shorter term, or a whole life insurance policy that gives you investment options, there are flexible ways to use life insurance for your family’s goals.
For example, you could choose a lower-cost $100,000 term life insurance policy that would cover your children’s educational debt or your grandchildren’s college costs. You could also choose a universal life insurance policy with flexible options to invest in stocks or borrow money against the cash value of the policy. Life insurance doesn’t always have to be about “covering your family’s current expenses in case you die.” The best life insurance companies can also help you plan your financial legacy and pay off debts for future generations.
If you’re buying life insurance as a 50-year-old, pay attention to what your family needs now, and what your future financial goals might be. If your goal is to replace your current income in case of your death, buying lower-cost term life insurance could be the right move. Whole life insurance policies, like universal life insurance, can be the right choice for some situations, but be aware of its higher premium costs and lower death benefits.
Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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CD rates are strong now. Will that change later this year? Read on to find out. [[{“value”:”
Image source: Getty Images
When inflation started surging in 2021 and continued into 2022, the Federal Reserve, which is tasked with controlling monetary policy in the U.S., knew it had to do something. That something took the form of implementing interest rate hikes that drove the cost of borrowing up for consumers across a range of loan products, from mortgages to auto loans to personal loans.
But those rate hikes also had a silver lining. For months now, people with extra cash on hand have been able to benefit from higher savings account and CD rates.
Meanwhile, the Fed has talked about cutting interest rates in 2024 in response to cooling inflation. And that has the potential to drive the cost of borrowing downward. But what about CD rates? Will they drop or hold steady?
The Federal Reserve has long maintained that it likes to target an annual inflation rate of 2%. In March, however, inflation was measured at 3.5% annually as per that month’s Consumer Price Index (an index that tracks changes in the cost of consumer goods and services). And that was an uptick from February.
Since inflation isn’t cooling as quickly as the Fed would like, there’s now a question as to whether interest rate cuts are going to happen this year. In a recent discussion, Fed Chair Jerome Powell was quoted by CNN as saying, “The recent data have clearly not given us greater confidence and instead indicate that it’s likely to take longer than expected to achieve [2% inflation].”
As such, it’s not looking like interest rates are going to fall anytime soon. And even if the Fed moves forward with rate cuts, based on Powell’s commentary, it looks like those cuts could be a ways off. If they don’t happen until the fourth quarter of the year, CD rates might largely hold steady for the remainder of 2024.
If the Fed decides to put off its rate cuts, CD rates should manage to hold steady for longer. At the same time, though, the Fed is pretty unlikely to raise interest rates this year unless upcoming inflation reports contain truly shocking data.
Because of this, if you’re considering opening a CD, you should get moving while rates are still high. Figure out what CD term is right for you, and then look at offerings from different banks to see which one has the most attractive rate and terms.
Another thing you may want to do is set up a CD ladder to give yourself more flexibility with your money. Let’s say you have $2,000 to put into a CD today. One thing you may want to do is split that sum into four $500 CDs and then open a 3-month CD, 6-month CD, 9-month CD, and 12-month CD.
Another option, if you’re confident you won’t need your money for a long time, is to open a long-term CD — say, one with a 48- or 60-month term. You may not get as high a rate on a longer-term CD as you will with a 6-, 9-, or 12-month CD. But since CD rates are expected to fall at some point, you have an opportunity to lock in a great rate on your money that soon enough may not be available for years.
All told, CD rates may or may not drop in 2024, depending on what the Fed does. Chances are, we don’t see an initial interest rate cut until at least the third quarter of the year, and possibly not until the fourth. So there’s still ample time to snag a great rate on your money.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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The federal government says this faux pas can invalidate your card. Lane V. Erickson / Shutterstock.com
Remember when COVID-19 vaccination cards were a thing and some folks laminated the proof of vaccination to keep it safe? As it turned out, that was a bad idea, preventing health care providers from adding boosters to a card. The same is true for your Social Security card, although for a different reason. The Social Security Administration (SSA) offers a succinct warning: Take that…
Checking your retirement contributions regularly and getting your full employer match are important. Read on to learn more steps you should take. [[{“value”:”
Image source: Getty Images
The ideal retirement will look different for every person. For some it may mean traveling the world. But for others, it may look like relaxing in the backyard with friends every other weekend. Regardless, it’s going to take money to secure that dream. Once you know how much you need to save, the only question that remains is how to get to that place as quickly as possible.
The best way to secure your retirement is to start saving as early as possible to take advantage of compound interest. But beyond that, there are steps you can take to get to a secure retirement even faster.
Here are four moves you should seriously consider if you want to accelerate your retirement savings.
The more you can generally afford to contribute to a retirement account, the better. While most people can’t contribute the maximum annual contribution limits for a 401(k), which is $23,000 for 2024 for those under 50, you may have the option to get your employer to match up to a specific amount of your annual salary.
For example, it may provide a match of up to 3% of your annual salary. So if you earn $75,000 a year, that’s up to $2,250 per year that can grow over time. That’s free money for retirement, so it’s vital to make sure that you’re contributing at least enough to get the full employer match to maximize your retirement savings.
Your 401(k) can be a convenient way to save, since they operate as set-it-and-forget-it accounts. That’s because you get to decide how to invest your money and how much to contribute from each paycheck when you get the job.
But the flipside of this convenience is that you may forget to increase your contributions regularly, meaning even if you’re earning more and can afford to contribute more based on your updated budget, you may not be doing so.
By contacting your provider to increase your retirement contributions, you can boost your total savings.
Even if you’re already contributing to a 401(k) through your employer, you likely still qualify to contribute to an individual retirement account (IRA) as well. For those who are maxing out their annual 401(k) contributions, that means an extra $7,000 to $8,000 per year you can contribute to your retirement, depending on your age.
But even if you aren’t maxing out your 401(k) each year, it’s still worth looking into opening a Roth IRA. These won’t reduce your taxable income now, but they can provide you with tax-free income in retirement.
It’s relatively easy to open one, too. Once you decide on a brokerage, you can open an IRA account and set up automatic deposits to that account. That way, you’ll be addressing the tax issue head on with minimal effort. (Just make sure that those funds are actually being invested, as that’s not always automatic with an IRA.)
If you run into financial issues on your road to retirement, it can be tempting to dip into your retirement savings. After all, if you’ve been saving for several years, or even longer, there may be a significant amount of money in those accounts. But there are consequences to taking early distributions or loans from retirement accounts that will negatively impact how much you actually get. (For example, there is a 10% early withdrawal penalty if you take money out of a 401(k) or IRA before age 59 1/2.)
And, of course, taking money out will reduce how much you’ll have access to in retirement. Plus, you’d lose out on any market gains during the time that those funds are not actively being invested.
If you’re having financial difficulties, it’s best to look at alternatives, such as personal loans, home equity loans, and 0% APR balance transfer cards, before considering something like an early 401(k) withdrawal or loan.
Your dream retirement may feel as if it’s miles away, especially if you run into money problems along the way. But by making small adjustments to your retirement contributions, as well as making sure that you’re giving your money as much time as possible to grow, you’ll be setting yourself up to reach that goal as quickly as possible. The key is staying attentive to your retirement strategy over time.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
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